Consider the economy represented by the aggregate demand-aggregate supply (AD-AS) graph shown, where output is above full employment output (Y*) and unemployment is below the naturalrate.

Price level (P)

Real GDP (Y)

LRAS

SRAS

AD

Y*

If policymakers are concerned about inflation, which countercylical fiscal policy would be appropriate to address thisconcern?

decrease governmentspending

decrease taxes

increase governmentspending

just wait until the economy naturallyadjusts

Adjust the graph to reflect the result of this countercyclical policyaction.